Bonds
Barrage of Short Wagers Leaves Bonds Primed for Post-CPI Squeeze
- Leveraged funds lift bearish bets for first time since January
- Tuesday rally suggests negative positioning may be overdone
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Treasury bond traders have turned so bearish ahead of a key inflation report that they risk getting squeezed on a less than red-hot reading.
Funds that use borrowed money to amplify returns increased short positions in the Treasury futures market for the first time in two months amid the recent rise in US yields, weekly data from the CFTC shows. Investors also boosted bearish wagers in the cash market, with JPMorgan Chase & Co.’s latest client survey showing a rise in short positions that left clients net neutral — as opposed to net long — for the first time in almost a year as of April 8.